Fairfax says replacement being sought for departing MD Simon Tong

Fairfax Media says it's looking for a permanent replacement for New Zealand managing director Simon Tong, who has resigned just days before a Commerce Commission ruling on the proposed merger with NZME.

Mr Tong, who joined Fairfax NZ in September 2013, will leave next Friday and begin as ASB Bank's executive general manager technology, innovation and payments on March 27, making him part of ASB’s executive leadership team. Before his Fairfax role, Mr Tong was chief executive of Paymark for seven years.

A Sydney-based spokesman for Fairfax confirmed to BusinessDesk that the company will run a replacement process for the role but wouldn't speculate on what kind of skillset the publisher would be seeking. The acting Fairfax NZ managing director will be Andrew Boyle who last stepped up as acting chief in 2013 when Allen Williams returned to Fairfax in Australia.

Mr Tong's exit comes when Fairfax's New Zealand business is at a crossroads, with a merger with NZME merger seen as the best way to create a dominant news organisation better equipped to compete with online businesses that piggyback on its content.

In an internal memo Mr Tong sent to staff and leaked to NBR, he says he only informed the company’s executive of his decision this morning and that it was prompted by a desire to “seek out new challenges.”

Mr Tong says he is “very confident that I leave behind a well thought through plan and a team of highly skilled leaders who are organised and crystal clear on the priorities.”

Although he notes the announcement “may come as a shock,” it shouldn’t, given that he would have been made redundant in the wake of a successful merger, which constitutes a takeover of Fairfax by NZME.

Mr Tong's exit comes as the Commerce Commission's decision on the media merger looms large on Wednesday. It was originally due last August but was delayed due to the complexity of the deal. The regulator released a draft determination in November rejecting the merger, saying it would "result in an unprecedented level of media concentration for a well-established liberal democracy," with the potential loss of multiple media voices a major part of the decision.

The regulator held a public conference in December. In NZME and Fairfax's public response to questions raised during the conference, the companies argued that reducing duplication in news coverage would be "efficiency-enhancing and will not materially detract from the volume or quality of news coverage" and that TVNZ, Newshub and RNZ are and will remain a serious competitive constraint if the merger is allowed.

Fairfax Group chief executive Greg Hywood has warned a formal rejection would spell an  "end-game" for its Kiwi assets because they need to stand on their own feet, and the Australian parent has previously confirmed the New Zealand business has attracted a low-ball offer from a secret suitor.